Even in bad economic times, there are people wanting to move into apartments (maybe even more people – nobody’s buying houses), so you WILL be able to replace a tenant. And you can look for somebody whose job appears safe, so they’ll likely continue paying rent.
If you have to leave the apartment vacant, at least it isn’t costing you as much in utilities, or especially wear-and-tear/damage from tenants. And they all do that.
Plus, if it’s sitting empty, now’s a good time to refurbish/ upgrade an apartment – lots of remodeling contractors are hungry for work and will bid cheap. Especially if it’s no rush – the apartment is vacant for 2-3 months. And building supply stores are also desperate for sales right now – good deals are available. And add sprinklers/smoke alarms to get discounts from your insurance company.
Refurbish one unit, then offer that to your good tenants, ones who are still paying their rent on time. Offer them a deal, less than the full rate, but slightly more than they’re paying now, for a 1-year lease. Then refurbish their old unit after they move.
How would this change in a rent-controlled unit? I don’t know much of the details, but it seems a landlord would be keen to remove any long-standing rent-controlled tenants if they could. From the sidelines it seems this situation would be bad for those in a rent-controlled apartment.
Or are there other laws limiting eviction for those units?
On the other hand, it DOES give them a convenient excuse to get rid of troublesome tenants. The landlord can then turn around, do repairs on the now empty unit, and attempt to rent it out because there are in fact people who are still employed and looking for a place to live.
On the other other hand, though, some establishments are running on momentum, leading to no payment = eviction without considering current circumstances.
Or a lot of people moving in with family and/or friends, leading to very crowded conditions in the units that are occupied, which is just what we need during a pandemic, right?
You might be able to find someone to replace a tenant. If you’re an owner of multiple properties, that becomes challenging. You still have some flexibility as a landlord, such as lowering the rent. It depends on the tenant. If they’re good tenants, you work with 'em. If they’ve always paid their rents late, out the door they go.
In the Bay area, rents are way down (9% in San Francisco, over that in other places) which shows that it might not be that easy to get new tenants. What is happening is that they can move further away and work from home. I don’t know what your market is like. ( Link. )
And stopping evictions is not the same as free rent - I assume those people still owe it.
The best solution is the one which has reduced the demand for evictions so far - good unemployment so people without jobs can still pay rent. Guess who is against that strategy?
Our friends (who were also our real estate agents) are as busy as ever, if not more so. People still need to live somewhere, and people who are now working from home (possibly while also taking care of their children) may now need more space than they did before, or differently configured space. People’s leases continue to end. People now place even more of a premium on having their own private outdoor space - I know my garden has been one of the few things maintaining what’s left of my sanity. Our friends sell to families, in general, not to flippers (and to the extent that they do sell to flippers, it would likely be a single-family home or 2- or 3-unit building - they don’t do large buildings).
Well, I’m a landlord so I can answer some of this.
Our tenants are planning to move when their lease ends next months. While the market (Hudson County, NJ) is down, my realtor tells me that places are renting. So it’s not true that it’s “nearly impossible to find a replacement”. It’s like unemployment. Yes, the market is slow, but I’m still going on interviews and people are still getting hired.
Yes, there is always a bit of “rolling the dice” with a new tenant. But our tenants do go through a background and credit check. They also have to be able to come up with first months rent plus a deposit. Depending on the situation, you are replacing a deadbeat with a 0% of paying the rent with a new tenant who has a significantly higher % chance of paying the rent.
If I’m not receiving rental income from you, I’d just assume not have you on the property contributing to wear and tear and possibly damaging something you can’t afford to pay for.
The agent we used a bit over a year ago told me it’s all families. And that it’s nuts, with 30 offers within a few days of listing. But the market in and around DC has never been representative of the rest of the country so a hefty YMMV here.
If a landlord is renting a property which is paid off or has significant equity built up, it may be very enticing to sell the property rather than dealing with a non-paying renter or renting for a significant discount. And if the landlord has a mortgage, it may be necessary to sell the house if the mortgage cannot be paid.
In general, there are lots of hassles being a landlord. They are doing it much more for the money than the enjoyment. Add in the risk of having a tenant living in a valuable asset which can suffer lots of damage, a landlord may find it very easy to decide to have the place empty or get rid of it rather than take a significant cut in the rent.
I appreciate the answers, even if I’m still skeptical. My experience here in Las Vegas when I bought my house in 2013 was that there was a large pool of investors who had local agents who were purchasing homes for them. I lost over 70 bids in 16 months of looking for a house, almost all to immediate cash offers. In fact, I ended up buying a home quite a bit more expensive than I had intended, simply because I could not win a bid at a lower price (despite having all my financing in place).
So home sales happening alone isn’t enough to make me think that families are buying those homes; hence my query.
It was definitely a thing (although idk about right now with CV). I sent someone a big article about it, which I can’t find now - it was from somewhere like the Atlantic or New Yorker or some such. Investment groups buying up huge amounts of rental properties all over (including houses), and then jacking up rates and pricing poorer people out of the market.
Maybe this one:
